Alpha Picks
Strategy - October Alpha Picks: Earnings Delivery Amid Macro Uncertainty
Highlights
- September sell-off: The JCI fell 7.9% mom; our picks declined 9.5%, underperforming by 1.6%.
- October recovery hinges on macro stability and earnings: The Fed meeting, 3Q26 results and market-structure changes are key watchpoints.
- Rotate towards company-specific catalysts: Add TLKM, AADI and GOTO; remove AMMN, ARCI, and BMRI. Our picks: AADI, ASII, BBCA, BULL, CMRY, ELSA, GOTO, INKP, TLKM, and EXCL
What’s New
- September: Macro-led sell-off. The JCI fell 7.9% mom in Sep 26 while the rupiah weakened 1.0% against the US dollar. Technology (-15.1%), infrastructure (-12.0%) and property (-11.5%) led the declines, while industrials (+0.6%) was the only sector to gain. Amid higher global yields (US 10-year Treasury yield above 5%), stubbornly high oil prices and persistent currency pressure, along with the implementation of a lower minimum share price (Rp1/share, down from Rp50/share) introduced additional price-discovery risk for low-priced stocks and may have further amplified market volatility. Our 10 September picks fell 9.5% on a simple-average basis, underperforming the JCI by 1.6%. AMMN (+3.2%) was the only positive performer, while BULL (-24.7%) and EXCL (-15.5%) recorded the largest declines.
- October outlook: Recovery depends on macro stability and earnings delivery. The JCI is likely to remain volatile in Oct 26. A rebound is possible if global bond yields stabilise, rupiah pressure eases and foreign selling moderates. Higher oil prices and potential El Niño-related food inflation could constrain BI's policy flexibility and weigh on household purchasing power, limiting the breadth of any rebound. The 3Q26 results season will test commodity earnings, consumer resilience, infrastructure contract delivery, and banks’ margins and asset quality, while the October Fed meeting (27-28 October) will shape global yields and foreign flows. A sustained market-wide re-rating requires clearer improvement in currency stability, foreign flows and policy confidence, so we expect an uneven recovery led by companies that beat earnings expectations, although greater clarity on Indonesia's MSCI outcome ahead of the November deadline should broadly support flows.
- Market structure is an October watch item. BEI is phasing short selling back in, with initial eligible-stock lists featuring only five highly liquid large-cap stocks: ASII, BBCA, BRPT, BUMI, and INDF. This is due to take effect in October, adding downside-volatility risk. The planned cut in the minimum share price to Rp1 from Rp50 was implemented on 28 September, which mainly affects illiquid stocks (with the exception of GOTO) and is a small-cap price-discovery issue. Note that GOTO’s recent trading value is Rp2.7t, significantly the highest in JCI.
Highlights
- September sell-off: The JCI fell 7.9% mom; our picks declined 9.5%, underperforming by 1.6%.
- October recovery hinges on macro stability and earnings: The Fed meeting, 3Q26 results and market-structure changes are key watchpoints.
- Rotate towards company-specific catalysts: Add TLKM, AADI and GOTO; remove AMMN, ARCI, and BMRI. Our picks: AADI, ASII, BBCA, BULL, CMRY, ELSA, GOTO, INKP, TLKM, and EXCL
What’s New
- September: Macro-led sell-off. The JCI fell 7.9% mom in Sep 26 while the rupiah weakened 1.0% against the US dollar. Technology (-15.1%), infrastructure (-12.0%) and property (-11.5%) led the declines, while industrials (+0.6%) was the only sector to gain. Amid higher global yields (US 10-year Treasury yield above 5%), stubbornly high oil prices and persistent currency pressure, along with the implementation of a lower minimum share price (Rp1/share, down from Rp50/share) introduced additional price-discovery risk for low-priced stocks and may have further amplified market volatility. Our 10 September picks fell 9.5% on a simple-average basis, underperforming the JCI by 1.6%. AMMN (+3.2%) was the only positive performer, while BULL (-24.7%) and EXCL (-15.5%) recorded the largest declines.
- October outlook: Recovery depends on macro stability and earnings delivery. The JCI is likely to remain volatile in Oct 26. A rebound is possible if global bond yields stabilise, rupiah pressure eases and foreign selling moderates. Higher oil prices and potential El Niño-related food inflation could constrain BI's policy flexibility and weigh on household purchasing power, limiting the breadth of any rebound. The 3Q26 results season will test commodity earnings, consumer resilience, infrastructure contract delivery, and banks’ margins and asset quality, while the October Fed meeting (27-28 October) will shape global yields and foreign flows. A sustained market-wide re-rating requires clearer improvement in currency stability, foreign flows and policy confidence, so we expect an uneven recovery led by companies that beat earnings expectations, although greater clarity on Indonesia's MSCI outcome ahead of the November deadline should broadly support flows.
- Market structure is an October watch item. BEI is phasing short selling back in, with initial eligible-stock lists featuring only five highly liquid large-cap stocks: ASII, BBCA, BRPT, BUMI, and INDF. This is due to take effect in October, adding downside-volatility risk. The planned cut in the minimum share price to Rp1 from Rp50 was implemented on 28 September, which mainly affects illiquid stocks (with the exception of GOTO) and is a small-cap price-discovery issue. Note that GOTO’s recent trading value is Rp2.7t, significantly the highest in JCI.
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